The Tax Suite offering is available to SAICA members and non-members on an annual subscription basis. Designed to be the digital
channel of choice on tax information in South Africa, Tax Suite is primarily – but not solely – aimed at tax practitioners. Just about anyone that has anything to do with tax will benefit in subscribing to Tax Suite, although SAICA members pay a reduced subscription fee.
With the business objective of offering comprehensive tax information through a single electronic portal, we disseminate tax specialty information, products, tools and services to a widening client base. As a subscriber you’ll get weekly tax alerts, monthly newsletters and a quarterly journal, with online access to all our aggregated tax-related information. Visit www.taxsuite.co.za for more information.
BRICS Business Council
At the recent BRICS Summit held in Durban, the members of the BRICS group of emerging economies (Brazil‚ Russia‚ China‚ India and South Africa) set up a Business Council to strengthen economic ties‚ trade and investment between the
business communities of the five countries.
The Department of Trade and Industry (the dti) stated that before the summit it was agreed that each BRICS country would nominate to this council five business executives who are leaders of different business organisations or sectors in their
SA nominated mining magnate Patrice Motsepe as the chairperson of its representation‚ which included Business Unity SA CEO, Nomaxabiso Majokweni‚ Zungu Investment executive chairperson Sandile Zungu‚ Sekunjalo group chairperson global Survey and Transnet.
Women entrepreneurs need support
According to Census 2011, 15% of South African households have female breadwinners, where a married woman is the
head of the household. As South Africa’s unemployment rate rises and it becomes harder to find permanent employment, more
and more women are looking to entrepreneurial endeavours to help them support their families.
The reasons for this are the same as for men. “Women,” says the 2012 Global Entrepreneurship Monitor (GEM), “show marked
differences from men in characteristics such as their attitudes about entrepreneurship, the industries they operate in, and their ambitions for growth.” It also suggests that women may face a tougher battle than men, though, as “women entrepreneurs may not be sufficiently empowered or supported to allow them to contribute to new business start-ups”.
“The reasons for this may include cultural and societal attitudes and access to resources and opportunities. Policies that can promote societal attitude changes, and train, support and encourage women entrepreneurs will promote inclusiveness and fuel economic growth.”
Annie McWalter, CEO of The Hope Factory believes that its approach of holistic and hands-on mentoring helps to provide some much needed support to the entrepreneurs on its programmes. She says, “All of our programmes include a large mentoring component where we walk the business journey with our entrepreneurs. Through this programme we assist each business owner with the issues that their particular business faces”. Over the last 12 years The Hope Factory has had more than 1000 people attend various business and skills development programmes, with a major emphasis on starting and growing one’s own business – approximately 60% of these businesses are female-owned or run.
Petrol price –keep track of company vehicle usage
On March 5, the fuel price rose to a new record, which will not just hurt the pockets of motorists, but will impact business operations. Lourens Joubert, Santam’s head of commercial insurance, warns business owners to monitor usage.
“Companies could open themselves up for alarming fuel bills if they do not implement strict guidelines for the usage of company vehicles, especially when these are also used in personal capacity by employees,” says Joubert. “While personal use may be allowed by certain companies, employees should not take advantage by embarking on excessive trips,” adds Joubert.
As it may be difficult to prohibit personal use of business vehicles, companies can adopt these guidelines to keep
track of usage:
• Employees should maintain a daily travel log listing mileage driven, destinations and the reason for each trip.
• Select the correct models with low emissions to optimize company car tax calculations.
Great Basis for business careers
Mid-tier accounting firms offer such a diverse range of experience and exposure that their alumni are found among the top echelons of almost every industry. Numerous prominent businessmen completed their training contracts at PKF, a mid-tier accounting firm. These include Gidon Novick, former CEO of Comair, founder of Kulula.com and current CEO of Discovery Vitality; William Kirsh, founder of Primedia; and Ricky Farber, current FD of Discovery.
A PKF graduate from the class of 2002 is Yolanda Cuba, the former CEO of Mvelaphanda Group who was also an executive director of Mvelaserve. She is currently a non-executive director of ABSA Bank, ABSA Group, Mvelaphanda Resources, Steinhoff International and Reunert. A prominent PKF graduate in the financial sector is Sam Hackner, CEO and global head of Investec Property and a Director of Investec GLL Global Special Opportunities Real Estate Fund.
Andrew Hannington, National Chairman of PKF, says: “From airlines to media and mining to financial services, these former trainees have done spectacularly well, and I have no doubt that the breadth of training they received with us contributed to their success.”
Not only is it graduates who have achieved, but former partners as well. Margaret Dawes, who after nine years as a partner of the firm, moved to commerce and industry into a top executive position. Appointed as Executive Director for Africa at Sanlam Emerging Markets in 2008 and having served as Chief Financial Officer since 2005, she shares Hannington’s view that the breadth of experience in a mid-sized firm delivers “a brilliant foundation for whatever you want to do in life”.
Gadget of the month: Samsung Galaxy S III mini
The GALAXY S III mini is powered by Android™ 4.1 (Jelly Bean), the latest version of the world’s most popular smartphone operating system, with stunning graphical capabilities, fast screen transitions, and an upgraded Google Now service. The GALAXY S III mini shares the GALAXY S III’s breakthrough design and simple elegance.
It has a beautiful 4.0-inch Super AMOLED display, offering a generous viewing experience that lets you view multimedia and Web content in brilliant colour and clarity. Furthermore, the GALAXY S III mini is packed with intelligent technology such as, S Voice, S Beam and the ‘Buddy photo share’ function – allowing photos to be easily and simultaneously shared with friends.
However, what certainly makes the S III mini a “must have gadget” is its compact size, giving users a comfortable grip and allowing a convenient one-hand operation. The GALAXY S III mini is available through leading retailers for R3 999.00. For more information go to www.samsung.com.
A catalyst for NDP implementation
President Zuma, in his 2013 State of the Nation address, alluded to the government’s focus on improving infrastructure in terms of the National Development Plan (NDP). He also emphasized the need for an integrated urban development framework to assist municipalities to effectively manage rapid urbanisation.
KPMG Partner Kobus Fourie said: “Already, 37 percent of the South African population live in the eight major metropoles and produce 62 percent of national GDP.”
Almost two thirds of South Africa’s population live in urban areas, with the rate of urbanization expected to continue. Cities have an important role as centres of economic infrastructure provision. Most infrastructure spending is usually in a city, or connects cities.
A key to infrastructure development is the role of water. The amount of unaccounted for water, due to leakages, incorrect billing and theft is in the region of 40 percent in some areas. Water treatment plants are deteriorating – a common problem around the world.
Accounting news: Darrel Scott appointed as Chairman of the IASB’s SME Implementation Group
Darrel Scott CA(SA), an IASB member, has been appointed as Chairman of the SME Implementation Group (SMEIG). Bruce Mackenzie and Frank Timmins also CAs(SA), have been members of the SMEIG since 2010. More information on Darrel Scott’s appointment can be found on the IASB website.
Major review conducted on the IASB due process
The Trustees of the IFRS Foundation have performed a major review of the IASB and IFRS Interpretations Committee
This review represents the first key changes made to the due process of the IASB and IFRS Interpretations Committee since 2006. The revisions include:
• Consolidation of the due process requirements of the IASB and IFRS Interpretations Committee into a single document.
• Incorporation of a comprehensive discussion of the process to be followed by the IASB in assessing the likely effects of an IFRS.
• A detailed description of the research programme to be undertaken by the IASB on IFRS projects, which has become an integral part and a development base from which all potential standards-level projects will be identified.
• A description of the process to be followed by the IASB in conducting and completing post-implementation reviews (PIRs).
The IASB utilises PIRs to analyse unexpected issues that have arisen from the practical implementation of an IFRS and the potential impact of the provisions. A PIR normally begins after the new requirements have been applied internationally for two years, which is generally about 30 to 36 months after the effective date. Each review has two phases. The first PIR conducted by the IASB was on IFRS 8 – Operating Segments, by publishing a Request for Information document in July 2012 for a comment period of four months. The next IFRS to be subjected to a PIR is IFRS 3 – Business Combinations, and the IASB is expected to start with this review by the end of June 2013.
The above changes to the IFRS Foundation Due Process handbook, the related feedback statement and the amendments to the IFRS Foundation Constitution, can be downloaded from the IASB website.
TAX NEWS – VAT CASE
A CC vendor deducted input tax on a VAT-return without having the VAT input invoices. If the CC possessed the necessary tax invoices, it should have been entitled to make the deduction. Due to an alleged fraud in the supplier’s administration, the CC was unable to obtain the relevant invoices. SARS instituted a tax audit and issued an assessment for R4 553 000. This case highlights a problem often encountered in practice. In terms of the Value-Added Tax Act (VAT Act), the vendor may only deduct input tax [refer to section 16(2)] from output tax, if the claim is supported by tax invoices that meet section 20 requirements.
This vendor relied on section 20(7) of the VAT Act and requested SARS to direct that a tax invoice is not required. SARS refused and the CC objected. The court agreed that SARS was correct to disallow the objection, as the VAT Act does not permit objections against a section 20(7) decision. The court did not decide on whether or not it would be possible to allow the deduction on the basis of a constitutional right to: “administrative action that is lawful, reasonable and procedurally fair.”
The vendor in this case relied on section 20(7) of the Value-Added tax Act and requested SARS to direct that a tax invoice is not required. SARS refused to do so and the CC objected against SARS’s disallowance of the deduction. The court agreed that SARS was correct to disallow the objection as the Value-Added Tax Act does not permit an objection against a decision in terms of section 20(7). The court did not decide on whether or not it would be possible to allow the deduction on the basis of a person constitutional right to “administrative action that is lawful, reasonable and procedurally fair.”
This case illustrates the fact that where a vendor has paid input tax, but does not have the required documents in its possession, it may not deduct the input tax that it suffered on the acquisition of the goods or services. If the vendor proceeded to make a deduction, in such an instance, SARS will be correct to add back the tax deducted and, in terms of the Tax Administration Act, also to impose a percentage based penalty.
Change coming for SMEs
South Africa was represented by Bruce Mackenzie at the February 2013 meeting of the International Accounting Standards Board’s (IASB) SME Implementation Group (SMEIG) held in London. Being represented in this forum is crucial to ensure that South Africa is part of the ongoing revisions and to be able to positively influence improvements. SMEIG proposed significant updates to the International Financial Reporting Standard (IFRS) standard for SMEs (IFRS for SMEs). The original standard was issued in 2009 and after four years, is due for review.
Items discussed included additional options for property, plant and equipment, as well as an option to revalue assets. Others were to bring in additional cost benefit exemptions to fair value for SMEs and the possibility of reduced disclosure requirements. The IASB hopes to issue an exposure draft later this year, with the changes to become effective from 2015.
POLL OF THE MONTH
We asked …
Gauteng Provincial Government wants to stop sales of alcohol on Sundays…
They must stop blaming alcohol for all the wrongs in the society – 36%
It is a good way to fight crime and reduce violent crimes – 14%
It is a waste of money, time and resources – 19%
It is a joke – 8%
I wish this can become a national Act – 22%
Who said accountants don’t give a flip …per?
The Stellenbosch Thuthuka students (of Stellenbosch University) gained 12 new honorary “members”. As part of the Stellenbosch Thuthuka students’ commitment to community service and giving, they raised money and adopted 12 African penguins from SANCCOB (the Southern African Foundation for the Conservation of Coastal Birds).
African penguins are endangered, as their numbers have declined by 64% in the last decade alone. It costs approximately
R500 to rehabilitate a penguin back to health and release it into the wild. The money raised assists in funding the rehabilitation. The honorary Stellenbosch Thuthuka students as named by the donors are: Stb Thuthuka; SAICA; CA(SA); Finrek; Sir Wil O. Pingo 1st; Mrs. Bishop S. Rico; Frodo; Snafu; Riaan; Roelfie; Tatyana; Ivankov.
We expect that the Stellenbosch Thuthuka family will continue to grow in the near future, said Riaan Rudman, senior Thuthuka Project Manager.
THIS MONTH’S MUST READS …
What to do when you want to give up by Allon Raiz
Running your own business is hard. When times are tough, it gets even harder. What to do when all the financial indicators are telling you that you’re a failure, but a voice deep inside is telling you that you have something special? When do you know
whether you are conning yourself, or if indeed there is something worthwhile in your business?
How do you handle the disparity between what you portray to the world and what is really going on inside? Allon Raiz has been there, and has guided countless other entrepreneurs through the ultimate challenge of being an entrepreneur. This book will show you how to assess whether your business can weather the challenges that face so many small businesses.
A good African Story by Andrew Rugasira
This is an inspirational story of how an African-owned coffee company became a global brand. Since it was founded in 2003, Good African Coffee has helped thousands of farmers earn a decent living, send their children to school and escape a spiral of debt and dependence.
Despite huge inflows of aid, Africa remains mired in poverty, disease and systemic corruption. In this book the author argues that trade has achieved what years of aid failed to deliver, and has provided a tantalising glimpse of what Africa could be. As he recounts the very personal story of his company and the challenges that he faced – and overcame – as an African entrepreneur, Rugasira discusses the barriers that currently prevent fair and equaltrade between Africa and the rest of the world.